HIPPA Explained for Small Businesses:

The Health Insurance Portability and Accountability Act of 1996, or HIPPA, has specific ramifications for small business owners. This act was intended to provide more protection for patient's information and has enacted stricter privacy controls.

There are four main objectives to HIPPA: 1. Eliminating job-lock for employees suffering from pre-existing conditions, 2. The reduction of health care abuse and fraud, 3. Create and enforce standards for patient information and 4. Provide greater security and privacy for patient's information.

HIPPA is divided into five sections, or titles, which will be explained below.

Title I - To Guarantee Access to Health Insurance, Portability and Renewal. This title was formed to get rid of specific exclusions that were preventing people from getting health insurance due to a pre-existing condition, to guarantee health insurance coverage and eliminate discrimination due to the health of an applicant. It is important to understand how this will affect your hiring of new employees. You will not be able to turn away an applicant based solely on a pre-existing condition.

Title II - Simplification and Fraud Control. Fraud runs rampant in the health insurance industry, and this particular title was created to prevent and control fraud and abuse. This title also covers Administrative Simplification (AS) provisions. Typically, the claim process and sharing of patient information was complicated and confusing. HIPPA intends to change this process, making it easier for everyone involved in this process. In addition to preventing fraud, Title II of HIPPA is working on the reform of medical liability.

Title III - Tax Incentives and Medical Savings Accounts. As costs for health insurance continue to rise, many Americans are unable to afford health insurance. Current estimates show that at least 50 million Americans do not have health insurance and that figure is most likely a low estimate. By introducing tax breaks and medical savings accounts, it is hoped that more people will have access to health insurance plans that they can afford.

Title IV - Greater Enforcement of Group Health Plan Provisions. This is an area that has been rife with problems. Group plans are difficult to administrate and Title IV promises to make the process easier, and cut down on problems with enforcing these provisions.

Title V - Provisions for Revenue Offset. This title deals with the Administrative Simplification (AS) provisions, but in more detail than Title II. This title carried specific deadlines for implementation. Providers that use electronic means to transmit or perform claim submissions must comply with this new rule. This also refers to faxes, which can affect many business owners who submit claims to group health insurance providers.

If you are unsure of what you need to do in order to be in compliance with new HIPPA regulations, it is a good idea to discuss this with your group health insurance plan representative. If you are submitting claims for your employees, you must comply with these new standards.

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